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By Neil Maidment
LONDON, April 9 (Reuters) - Britain's newly-privatised RoyalMail warned an investigation into a rival's complaintover wholesale mail price rises would lead to a long period ofuncertainty around the prices it charges other postal operators.
Royal Mail's regulator Ofcom on Wednesday said it wouldinvestigate the complaint from Britain's No.2 postal operator,TNT Post under its Competition Act powers, a process that cantake up to two years.
An enquiry under the alternative Postal Services Act wouldnormally take less than half that time.
TNT Post's complaint, made in February, is the latest in anincreasingly fierce battle between the two groups, sparked bythe former's plans to challenge Royal Mail's dominance byrolling out its own complete British delivery network.
Royal Mail says such competition could threaten its abilityto sustain a six-days-a-week universal service, as TNT Posttargets only profitable areas. On Wednesday it called for Ofcomto bring forward a review, planned for late 2015, of how it willprotect the service.
TNT Post has complained about Royal Mail's decision tochange conditions and increase the prices it charges to deliverpost collected and pre-sorted by its competitors, an agreementknown as an access contract.
Access contracts account for around half of the UK's inlandaddressed mail, with TNT Post making up over half of this.
Royal Mail wrote to wholesale customers following TNT'scomplaint to say its planned price hikes were suspended.
That, it said, would hamper the firm's ability to respondcommercially to market conditions, but not its rivals.
It also creates uncertainty for Royal Mail around itspricing structure and for its customers, which as well as TNTPost include UK Mail and banks like RBS andLloyds, now unsure what they will pay in future.
"We are concerned Ofcom's decision to investigate under itsCompetition Act powers may create a period of uncertainty in theUK postal market. We are keen the investigation is completed asquickly as possible," Royal Mail said, adding its contractchanges were fair and TNT Post's complaint unfounded.
Ofcom did not give a time-frame for the investigation.
Royal Mail shares closed down 2 percent at 515 pence onWednesday.
The price hikes, announced in January by Royal Mail as ameans to counter shrinking letter volumes, would see rises ofbetween 0.3 percent and 1.0 percent above inflation.
A discount would be given to access customers who couldsupply the firm with monthly forecasts of mail volumes for up totwo years ahead, which would allow Royal Mail to save money bybeing able to plan ahead more efficiently. (Editing by Erica Billingham)
